[2020 National Audit] Seoul City "Additional 10,000 Permits for Station-Area Youth Housing Within the Year"

Lee Jong-bae, Member of the People Power Party [Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] On the 20th, Seoul City responded to criticisms that the contract rate and supply rate of the station-area youth housing project are low, resulting in reduced effectiveness in housing stability, stating, "The contract rate is continuously rising, and it is expected to achieve 72% of the annual supply target."

On the same day, Lee Jong-bae, a member of the National Assembly Land, Infrastructure and Transport Committee from the People Power Party, pointed out the lack of effectiveness during the Seoul City audit held at Seoul City Hall, saying, "Half of the youth housing in Guui-dong, Gwangjin-gu, which started occupancy in April, is vacant."

The housing in question has a deposit of 45 million KRW and a monthly rent of 460,000 KRW. Applying Gwangjin-gu's deposit-to-rent conversion rate of 6.9%, the deposit converts to 10 million KRW, making the monthly rent 660,000 KRW. Representative Lee said, "Contrary to Seoul City's initial promise to supply at prices cheaper than the surrounding market, the high prices have reduced demand among young people."

In response, Seoul City explained, "For the Guui-dong youth housing, the overall contract rate is currently 61%, a significant improvement from 32% in April," adding, "While the contract rate for the private rental newlywed couple type is somewhat low at 30%, the contract rate for other types excluding this is 78.7%."

Representative Lee also pointed out the insufficient supply rate of station-area youth housing. According to him, in 2017, 7,819 units were supplied against a target of 8,000 units, achieving a 97.7% fulfillment rate. However, after increasing the supply target to 15,000 units in 2018, actual supply decreased, with achievement rates of 27.1% in 2018, 42.9% in 2019, and 5.7% as of the end of September 2020.

Regarding this, Seoul City responded, "As for the supply rate, currently, 5.7% (852 units) of the annual youth housing permit target of 15,000 units has been approved, but considering approximately 10,000 units pending approval within the year, it is expected to achieve over 72% of the supply target."

They added, "With the recent increase in interest in youth housing, about 21,000 units are currently under permit review, and it is expected that supplying 80,000 units by 2022 will be feasible."